Why all the interest in the Porcupine Basin, offshore Ireland?

Rowland Thomas

Chief Geophysicist- Europa Oil & Gas

APPEX London 10-13 March 2014

www.europaoil.com

The inspiration – West African Cretaceous stratigraphic play

Cretaceous turbidite sandstones in stratigraphic traps

Talk Outline

1. Historical activity

2. 2011 Atlantic Margin Licensing Round – Turning Point

3. Current Activity

4. What happens next

1977-2001

Porcupine basin operators 2014

43/13-1 BP

LO 11/8

LO 11/9

Basin statistics

• 60, 000 km2 basin • 31 wells in total since 1977

– Amoco,BP, Britoil, Chevron, Deminex, Elf, Exxon, Gulf, Phillips, Marathon, Shell, Statoil, Total

• 3 prospects flowed hydrocarbons – Burren, Connemara, Spanish

Point

• No commercial success • 1 well, Dunquin, in last 12

years 0

1

2

3

4

5

6

7

1970 1980 1990 2000 2010 2020

Nu

be

r o

f w

ells

Year spudded

Burren 1978

Spanish Pt 1981

Connemara appraisal 1997

Dunquin 2013

Connemara 1979

1977-2001

• Seeking the next “North Sea” and using Brent Province geological model

• Constraints – Water depth: most wells drilled in <500 m, technical limit

of 3rd generation semi-sub – 1000 m harsh environment production not pioneered – 2D seismic only

• Most drilling was in North Porcupine basin – no quick wins and drilling ceased in 2001

• South Porcupine basin virtually unexplored • Tantalising results with reservoir, trap, source and

hydrocarbons all found, but no commercial discoveries

South Porcupine Basin Cross Section

Cross-section taken from PAD , 2006.

FEL 2/13 Mullen Cretaceous turbidite play

Dunquin

FEL 3/13 Kiernan Cretaceous turbidite play

Jurassic Pre-rift plays

FEL 3/04. Exxon P&A Dunquin exploration well July 2013. Residual oil shows reported in Lower Cretaceous carbonate reservoir. Suggest an oil prone source rock is present in the basin potentially

de-risking the source rock component.

Connemara Spanish Point

Burren

Late Jurassic source rock superhighway

Hibernia, White Rose Terra Nova

Burren, Connemara, Spanish Point

Mizzen, Bay du Nord, Harpoon

Dooish

?

North Porcupine & Flemish Pass discoveries

Name Operator Date Well WD

Burren Phillips 1978 35/8-1 430 m 733 bopd 34o API oil E. Cret. SST reservoir. 66 mmbo

Connemara BP 1979 26/28-1 374 m 5589 bopd 32-38oAPI U. Jur. SST reservoir. 172 mmbo

Spanish Point Phillips 1981 35/8-2 422 m 1000 bopd and 5 mmscf/d U. Jur. SST reservoir. 200mmboe

Mizzen Statoil 2009 Mizzen O-16

1100 m 100-200 mmbo Upper Jurassic reservoir

Bay du Nord Statoil 2013 1100 m 300-600 mmbo Upper Jurassic SST reservoir

Harpoon Statoil 2013 1100 m Under evaluation Upper Jurassic SST reservoir

2011 ATLANTIC MARGIN LICENSING ROUND – TURNING POINT

2011 Atlantic Margin Licensing Round •Announced Oct 2010 • Offered 1,017 full blocks, 55 part blocks 257,500 km2

•Closed May 2011 •Awards November 2011 •Awarded 53 full blocks and 11 part blocks •13 Licensing Options issued to : Antrim, Bluestack, Europa, Petrel, Providence, San Leon, Serica, Two Seas

2011 turning point

• 2011 Atlantic Margin Licensing Round brought in innovative companies with new ideas on hydrocarbon plays

• Licensing Option strategy bearing fruit with 2013 entry of Kosmos (3 licences), Cairn (3 licences) and Woodside (4 licences) by farmin as operators

• Mainstream industry is following exploration of the new Cretaceous play closely

• Exploration success will create a race to be second ‘Polarcus Amani’ vessel used to

acquire Kosmos 3D in 2013

Line PSB97-08 FEL 3/13 Mullen Plays

Data shown courtesy of TGS and WesternGeco

Seabed response

Polarity : black peak decrease in acoustic impedance

Lower Cretaceous Plays

Paleocene Play

Pre rift Jurassic Play

3/13

Mullen

Geoseismic Section

MULLEN PROSPECT

Mid Aptian Unconformity and correlative conformity

43/13-1

2014 state of the art

• 1000 m water depth exploration drilling is routine • Ultra-deepwater units capable of 3650 m water

depth • North Atlantic harsh environment developments

proven: Hibernia, Snohvit, Foinaven • 3D seismic – stratigraphic trap definition and fluid

content from rock physics • New geological model – Cretaceous turbidite

sands in stratigraphic trap – proven in Atlantic margin province in West African and South America

Costs are escalating

• Rosebank discovered 2004, FEED start 2012, currently under review

• 130 km NW of Shetland • 1100 m water depth • 240 mmbo • $300+ million E&A • $6-8 billion capex • Plateau rate 75,000 bopd &

100,000 mmscf/g • Would be first N. Atlantic 1000m

development • Would offer an economic value

proposition in Ireland

IRISH FISCAL REGIME

• No royalty, 25% corporate tax rate

• Additional Tax in form of Profit Ratio* “R factor”

• 15% tax in respect of fields where the profit ratio exceeds 4.5

• 10% where the profit ratio is between 3.0 and 4.5

• 5% where the profit ratio is between 1.5 and 3.0

• No change where the profit ratio is less than 1.5

Country/Region Government

Take (%)

North America 42-60+

South America 25-90

Ireland 25

Europe excluding Ireland 35-65

Sub Saharan Africa 44-85

FSU, Middle East, North Africa 60-90+

Asia (exclude Central) 40-84

Source: DCMNR (2007)

Fiscal Regime designed to

encourage deep water frontier

exploration

17

Transformational Asset

Europa Oil & Gas Portfolio

3. CURRENT ACTIVITY

PORCUPINE BASIN: EXPLORATION HOTSPOT

FEL 2/13: Mullen Prospect

Cretaceous stratigraphic play.

Kosmos Energy farm-in to

Europa. 3D acquisition 2013

FEL 2/04, FEL 4/08, FEL 1/14

Cairn Energy farm-in to Chrysaor

and Sosina Burren

Lower Cretaceous oil discovery

~700 bopd

FEL 3/13: Kiernan Prospect

Cretaceous stratigraphic play.

Kosmos Energy farm-in to

Europa. 3D acquisition 2013.

Dunquin

Middle Cretaceous Carbonate

prospect drilled by EXXON in July

2013 - oil shows suggest an oil

prone source rock is present in

the basin potentially de-risking

the source rock component

FEL 1/13

Kosmos Energy farm-in to

Antrim. 3D acquisition 2013

LO 11/03, FEL 3/13, FEL 4/14

Woodside farm-in to Bluestack

and Petrel

20

LO 11/10

Woodside acquires Two Seas

interest

FEL 2/14 Drombeg

Cretaceous stratigraphic play.

3D acquisition 2014

Connemara and Spanish Pt

Jurassic oil discoveries

3D surveys

Drill Spanish Point Q2/3 2014,

3D acquisition 500km2 2014

FEL 1/14

Polarcus multi-client 3D survey

2014 Providence to acquire 1065 km2 3D over Drombeg licence in FEL 2/14 as part of a 3200 km2 3D multi-client survey by Polarcus

Map provided by courtesy of Polarcus

Regional PAD 2D seismic survey 2013/14

2014 second season of PAD regional 2D survey in Atlantic Ireland, product ready Q1 2015

4. WHAT HAPPENS NEXT

3D impact – de-risk prospects

Current position

Derisk with 3D

Structures are large and potential reserves sizes are large : 100’s of millions of barrels. 3D will clarify the size ranges . Europa expects to clarify reserves in Q2 2014

Europa considers risks to be around 1 in 10. 3D seismic has potential to reduce this to 1 in 5, particularly if flat events, conformance and AVO anomalies identified. Europa expects to de-risk its prospects in Q2 2014.

NPV10 $18 bbl Minimum economic field size 100 mmbo ± 20

Drill timings for 2011 entrants

• Phase 1 of each FEL July/Nov 2013-July/Nov 2016, Seismic obligation only

• Phase 2 of each FEL July 2016 – July 2020, Commitment well

• Earliest feasible stretch case spud: summer 2015, 2 years after 3D acquisition.

Atwood Achiever under construction in South Korea. Due for delivery in June 2014 to Kosmos on 3 year contract.

Porcupine drilling plans

• Cairn to drill Spanish Point appraisal well in Q2/3 2014 with Blackford Dolphin. If successful suspend and return to test and further appraise in 2015.

• Kosmos have indicated two possible wells in Ireland in 2016 and 2017 on their latest corporate presentation, first one could be as early as 2015

• Intentions of other operators not announced

Next Atlantic Ireland license round

• Fiscal terms review completed in May 2014

• Licence round expected to open June 2014

• Licence round closes September 2015

• PAD regional 2D seismic available Q1 2015

• We anticipate a different demographic to the 2011 round with participation of mid-cap and large oil companies in addition to small caps

For further information contact:

Europa Oil & Gas (Holdings) PLC Porter Street,

London, W1U 6DD

UK

Telephone +44 20 7224 3770

mail@europaoil.com www.europaoil.com